COVID Claims Continue to Fail

As time passes and more COVID-related claims are adjudicated, it’s becoming apparent that judges aren’t feeling a lot of sympathy for employees hoping to capitalize, financially.

A bit of background is perhaps required, here. In the 2nd quarter of 2020, many businesses were shut down due to governmental restrictions and the overall impact of the COVID wave hitting North America. Business shutdowns meant widespread employee layoffs and, as time passed, many of those layoffs became terminations due to the effect of our Employment Standards Act (“ESA”).

The ESA limits the length of a continuous, temporary layoff to 13 weeks, after which it is deemed to be a termination of the employment relationship. During the pandemic, the maximum temporary layoff period was increased for a period of time.

Some employees found that – before their employer had any reasonable opportunity to resume operations and recall them to active duties – their employment was deemed to have been terminated. Many of those people, in turn, sued their employer for damages for wrongful dismissal. Those cases have been working their way through the system.

Blomme v. Princeton Standard Pellet Corporation

Karen Blomme worked for the Princeton Standard Pellet Corporation (“PSPC”) for over 20 years. PSPC manufactures wood pellets for home heating and animal bedding from waste wood fibres.

Ms. Blomme was one of 3 plant supervisors. In April of 2020, she was laid off with no stated date of recall.

In October of that year, Ms. Blomme’s lawyer asserted that her employment had been terminated without notice and that, as a result, she was entitled to 18 to 22 months’ wages as compensation. PSPC soon began communicating with Ms. Blomme, offering her back pay and the opportunity to return to work.

Those offers were not accepted, and Ms. Blomme sued for wrongful dismissal. At trial, Ms. Blomme asserted an entitlement to 24 months’ wages in lieu of notice but the judge concluded that “in the circumstance of this case, the range of reasonable notice is between 15 and 16 months.”

The Mitigation Factor

And then the judge turned to consider the issue of mitigation; on that topic, the judge commented…

There is no disagreement that an employee has a common law duty to take reasonable steps to mitigate the loss or damage they may experience as a result of a wrongful termination.  Damages for wrongful dismissal can be reduced or eliminated if the plaintiff did not take adequate efforts to secure alternative employment or did not accept an offer to return to employment, provided that it is a reasonable working situation. 

In this case, the main factual issue is whether it was reasonable for Ms. Blomme to return to work at Princeton in mitigation of her damages.  Princeton acknowledges that comparable employment opportunities for Ms. Blomme were relatively scarce during the relevant times. Nonetheless, it is noteworthy that Ms. Blomme first began looking for work on October 2, 2020, after consulting her counsel and sending the Demand Letter.

The judge went on to consider Ms. Blomme’s efforts to locate new employment…

Reframed for the circumstances in this case, the issue is whether Ms. Blomme, who was terminated by operation of statute after a temporary layoff that she initially agreed to, and who by October 1, 2020, took the position that she had been terminated, was required to mitigate by returning to work for Princeton in the same job as she had before the termination. Ms. Blomme’s circumstances are far-removed from a termination based on concerns about her performance. There was nothing personal about the decision to lay off Ms. Blomme, and I have accepted that Princeton had a legitimate reason for deciding to recall Mr. Mills before her. Even if Princeton was wrong in that assessment, it was not a decision made with the intent to humiliate Ms. Blomme.

In this case, Ms. Blomme was not singled out for layoff. She was one of a number of management and union staff at Princeton who were laid off as a result of the unprecedent global pandemic faced by many employers.  In the absence of conditions that would render her return to work unreasonable, on an objective basis, Ms. Blomme was expected to mitigate her damages by returning to work for Princeton. A reasonable person would be expected to do so.

The judge concluded that, in the circumstances, Ms. Blomme should have accepted PSPC’s offer to return to work and, had she done so, she would have been made whole. As a result, her claim was dismissed in its entirety and she was not awarded any damages at all.

And that spelled the end of Ms. Blomme’s hopes of receiving as much as 16 months’ wages as damages for wrongful dismissal. From the evidence cited in the Court’s decision, not only did she not work a day during the 16 months following her layoff, she didn’t even apply to work anywhere else during that period.

It’s difficult to imagine her lawyer having advised Ms. Blomme that doing absolutely nothing to mitigate her claimed losses was a good idea. It’s similarly difficult to envision her lawyer having advised her to reject PSPC’s offer of re-employment. Regardless of her reasons, she spent about 2.5 years working only on pursuing a legal claim that netted her precisely $0 in the end.

And that, says me, was absolutely the right and just outcome.



This item is provided for general information purposes only and is not intended to be relied upon as legal advice. Informed legal advice should always be obtained about your specific circumstances.

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